Building working class power

The Trades Union Congress was founded to advance the “general interests of the working classes”, and that remains our core mission today.

Working class jobs have changed with the shift to a service economy. Those earning less than the average wage are most likely to work in retail or as a care worker. And today’s working class is more diverse, with those earning below average more likely to be female or from a Black and minority ethnic background than those in the highest paid jobs.

But the working-class experience of poor pay, long hours, and class discrimination that the union movement has fought against remains all too common in today’s UK. And working-class households have been hit hardest by public service cuts.

TUC research shows that:

• Working class families have been hit hard by the pay crisis that started after the financial crash :Seven million employees in working class jobs have seen their pay flatline over the decade, while the highest earners have seen pay rises.
• A decade of austerity has had a disproportionate impact on working class families :for families on less than average earnings, cuts to public services over the last decade have been worth over five percent of their annual incomes – compared to less than one per cent for above average earners.
• Discrimination based on class background is still prevalent in the workplace today :TUC analysis shows that graduates with parents in ‘professional and routine’ jobs are more than twice as likely as working-class graduates to start on a high salary, no matter what degree level they attain.

Trade Unions have been vital to improving working class prospects. We’ve fought for the right to speak up in the workplace and negotiate better terms and conditions, and we know that where trade unions are strong, inequality falls. Strengthening our own movement, and our ability to negotiate for working people, is at the heart of trade unions’ mission to protect working class interests.

We need government action too. Government must reverse years of austerity and fund the public services that working class families rely on.

And after years of prejudice based on social background, it is clear that working class people won’t get a fair chance at work unless government puts in place a framework to tackle class discrimination. The TUC is therefore calling for new legislation to:

• Make discrimination on the basis of class unlawful, just like race, sex and disability.
• Introduce a legal duty on public bodies to make tackling all forms of inequality a priority.
• Make it compulsory for employers to report their class pay gaps.

However you define ‘working class’ it’s clear that working people’s interests are under attack.

There’s a long historical tradition of contested definitions and meanings of the term class. One understanding see only two classes – those who own capital, and those who exchange their labour for a wage. And we know that workers as a group have lost out over the last forty years: the share of GDP going to wages has shrunk from an average of 57 per cent between 1945 and 1975 to 49 per cent in 2018.

Throughout the twentieth century narrower definitions of class have been developed based on occupation. The Office for National Statistics now use a classification system called ‘The National Statistics Socio-Economic Classification (NS-SES)’, based on “ employment relations, i.e. aspects of work and market situations and of the labour contract”. with the categories ranging from ‘higher managerial occupations’ to the long term unemployed . ^[1] ‘Routine’ and ‘semi-routine’ jobs are often seen as ‘working class’ jobs on this definition.

NS-SEC Analytic classes

---

1 Higher managerial, administrative and professional occupations

   1.1 Large employers and higher managerial and administrative occupations
   1.2 Higher professional occupations

2 Lower managerial, administrative and professional occupations

3 Intermediate occupations

4 Small employers and own account workers

5 Lower supervisory and technical occupations

6 Semi-routine occupations

7 Routine occupations

8 Never worked and long-term unemployed

---

This definition is commonly used in monitoring of people from various backgrounds – and there is a clear value in this long-running measure which allows us to compare experiences over time and place.

However, research conducted in 2015 found that 60 per cent of people identified as working class – a figure unchanged since 1983 – including 47 per cent of those in jobs classified as managerial or professional. [2] Some of these workers may be those with a working class background, rather than those in working class jobs today. But we know that aspects of work often identified with ‘working class jobs’ – low or stagnating pay, a lack of autonomy, and intense and exhausting work are experienced by increasing numbers of working people:

•  Pay has stagnated: Workers in the UK have experienced the longest pay-squeeze in 200 years.^[3]
• Workers often don’t have a voice at work: Research in 2011 found that less than half (47%) of employees thought that managers were good at responding to suggestions from employees and just over one in three (35%) said that managers were good at allowing employees to influence decisions^[4]. The number of workers who can negotiate their terms and conditions through a collective bargaining agreement has declined from over 70 per cent in 1979 to just 26 per cent today^[5].
• Work is getting more exhausting: recent findings from the national Skills and Employment survey found work intensification increasing, with the proportion of workers in jobs where it was required to work at ‘very high speed’ for most or all of the time rising by 4 percentage points to 31 percent in 2017.^[6]

In our work on how class relates to pay and public services, we therefore look at a broader group of people, concentrating mainly on those earning below average incomes.

In our work on how class relates to pay and public services, we therefore look at a broader group of people, concentrating mainly on those earning below average incomes.

Finally, there is also a strong sociological tradition of looking at ‘cultural’ as well as economic capital, exploring the ways that cultural choices like the way people dress, or the type of music they like, have been used a way of marking and maintaining class distinctions. For example, researchers have  used  findings from the 2015 BBC survey on class to suggest a new classification of seven classes, based on groupings of economic, social and cultural factors.[7] Research has shown that these type of distinctions can be important in explaining economic differences, such as the lower pay experienced by those from working class backgrounds, even when they enter into professional jobs.[8]

We think that each of these measures can tell us something important about class. But rather than ignite a lengthy debate about definitions, we want to focus on how to tackle the persistent class inequality that still exists in Britain today. In the rest of this report we set out how:

• Pay in working class jobs has stagnated;
•  A decade of austerity is having a disproportionate impact on working class families; and
• Class discrimination means that those from working class backgrounds are still shut out of opportunities. 

In future reports we will explore other aspects of working-class experience in Britain today

When talking about working class jobs in this section, we look at class through the lens of both occupation and pay, looking at the experiences of people in jobs paid above and below the median, and at the low and high paid, as an approach to thinking about working class experiences today.

The seven million employees in jobs that earn less than median wages (£12.70 an hour in 2018) but aren’t in low paid jobs (defined here as 75 per cent of the median, or £9.60 an hour) have seen their pay flatline over the decade.

The minimum wage has helped push up pay at the very bottom – but without strong trade unions to ensure gains are widely shared, pay for those in jobs paid below the median is stagnating.

In contrast, those in the highest paid jobs, earning more than twice the median UK wage (over £26 an hour) have seen their pay packets increase by £1.26 an hour, a rise of four per cent, over the same period. For someone working a 35-hour week that would add up to a pay rise of £44 a week.

The chart below breaks this down further to look at the experience of different groups in the labour market, as set out above. It shows that:

• Prior to 2010, pay growth was fastest in percentage terms for the lowest paid jobs
  • Pay for those in jobs paid less than 75 per cent of the median grew by 10 per cent (£0.76)
  • Pay for those in jobs paid between 75 per cent and the median wage grew by 7 per cent (£0.73)
  • Pay for those paid between the median and twice the median wage grew by 6 per cent (£1.16); and
  • Pay for high earners – those paid twice the median wage grew by 4 per cent – though this was the largest in cash terms at £1.27.
     
• After 2010 both middle paid groups have seen their pay fall, with only the bottom and top paid groups seeing rises in pay.
  • The lowest paid jobs have seen pay increase by 5 per cent (£0.43)
  • Pay for low-middle earners has been basically stagnant – and is in fact now £0.14 below its 2010 level.
  • Pay for jobs between the median and twice the median has also fallen – by 3 per cent, or 61 pence an hour.
  • Pay for those jobs paid at twice the median wage has risen by 4 per cent – the largest cash rise again at £1.27.

Chart 2: Average real hourly pay in jobs at various parts of the pay distribution, 2002-2018

What are working-class jobs, and who’s working in them?

Working-class jobs have changed; with retail and care workers now the largest occupations for those earning less than the median wage.

Looking at those in the worst paid jobs, both Black and minority ethnic (BME) workers and women are overrepresented, whereas these groups are both under-represented amongst the higher earners.

Chart 3: women are overrepresented in the lowest paid occupation and underrepresented in the highest paid.

Chart 4: Percentage of Clack and minority ethnic (BME) employee in different occupation groups.

Boosting working class pay

The best way to get sustained pay rises in working-class jobs is by working people having the ability to collectively negotiate pay and conditions through our trade unions.

This is increasingly a view shared by international institutions examining economic growth: The IMF in 2015 published research showing the role of trade unions in tackling inequality, with “strong evidence that lower unionisation is associated with an increase in top income shares in advanced economies during the period 1980–2010”^[9]. The OECD’s 2018 Jobs Strategy argues that collective bargaining can “foster skills development and skills use in the workplace, and allow for the effective dissemination of good working practices”, while helping to “promote a broad sharing of productivity gains” ^[10].

Working class interests have been harmed by the decline of collective bargaining in the UK. Immediately after the second world war, collective bargaining coverage in the UK stood at 85 per cent.  In 1979, before the election of the Thatcher government, 82 per cent of UK workforce had their pay and conditions determined by collective agreements or wage council orders.  By 1996 (when currently comparable statistics start), coverage had fallen to around 35 per cent, falling further to stand at 26 per cent today.

Our first priority is therefore to boost working people’s ability to boost their pay and conditions through collective bargaining. Alongside this note we have published a new report^[11] setting out a comprehensive agenda for how to boost collective bargaining in the UK, including:

• Unions to have access to workplaces to tell workers about the benefits of union membership and collective bargaining (following the system in place in New Zealand).
• New rights to make it easier for working people to negotiate collectively with their employer, including simplifying the process that workers must follow to have their union recognised by their employer for collective bargaining and enabling unions to scale up bargaining rights in large, multi-site organisations.
• Broadening the scope of collective bargaining rights to include all pay and conditions, including pay and pensions, working time and holidays, equality issues (including maternity and paternity rights), health and safety, grievance and disciplinary processes, training and development, work organisation, including the introduction of new technologies, and the nature and level of staffing.
• The establishment of new bodies for unions and employers to negotiate across sectors, starting with hospitality and social care.^[12]

Even when those from working-class backgrounds attend university, they still enter the job market earning less than those from middle-class and private-school backgrounds.

TUC analysis of data provided by the Higher Education Statistics Agency (HESA) shows that graduates with parents in ‘professional and routine’ jobs are more than twice as likely as working-class graduates to start on a high salary, no matter what degree level they attain.

The table below shows the percentage of employed graduates in different salary bands at 6 months following graduation. It looks at how these differ depending on the occupation of the graduate’s highest-earning parent when they were 14. These figures are for those who graduated in the 2016/17 academic year.

It clearly shows that those with parents who worked in managerial and professional occupations are more likely to enter high-earning jobs after graduation than those with parents in semi-routine or routine occupations. A graduate from a professional background is twice as likely to be in a job earning above £30,000 per year than someone whose parents worked in a routine or semi-routine occupation.

Those with parents in professional occupations are also much more likely than those from working-class backgrounds to be in a job earning above £25,000 per year.

Percentage of employed graduates in different salary bands at 6 months following graduation, by highest-earning parent’s occupation at 14

Chart 6: Percentage of employed graduates who are earning above £30k six months after graduating

A joined-up approach

Although any one of the three methods we propose could have a positive impact on combating discrimination and disadvantage on the grounds of class, the three proposals would be best implemented together as they are mutually supportive in tackling the different forms of discrimination experienced by working class people.

• Socio-economic duty: this tackles systemic discrimination –structural discrimination stemming from public policy decisions at national, regional and local level
  For example: the greater impacts of austerity on working-class households
   
• Class pay gap reporting: this tackles institutional discrimination – the failure of employers to have workplace policies that improve awareness of socio-economic disadvantage and prevent class-based discrimination
  For example: failing to have a recruitment strategy that is intended to promote applications from candidates with a wide variety of backgrounds or only having links with schools from affluent areas
   
• Making discrimination on the basis of class unlawful,: this tackles Individual discrimination
  For example: recruitment processes and decisions that favour candidates from privileged backgrounds

1. A socio-economic duty

The Equality Act 2010 set out a socio-economic duty on public bodies. This was aimed at ensuring that all government departments and key public bodies placed tackling inequality at the heart of their decision making and that the “persistent inequality of social class, your family background or where you were born” was addressed in a systematic way^[24].

However, this part of the Equality Act has not been enacted by successive UK governments.

The power of a positive duty on public bodies is important in that organisations are required to justify and explain their decisions openly. The duty would not only promote the transparency and accountability of decision-makers but would mean that failure to deliver against the duty could result in legal challenge.

Recently there has been progress in this area, with the Scottish Government enacting the socio economic duty through  the introduction of its Fairer Scotland Duty^[25] in  April 2018. The Welsh Government has also announced its intention to introduce the duty soon.  A range of public bodies in England, mainly local authorities, have worked to incorporate the socio-economic duty into their approach to developing policy. Most notable among these is Newcastle City Council who have developed strategic policy as if the socio-economic duty was in force^[26].

In its latest report, the Social Mobility Commission has called for the enactment of the socio-economic duty, a call that has been echoed by the Equality and Human Rights Commission the UN Committee on Economic, Social and Cultural Rights and a range of civil society organisations. 

2. A duty on employers to report class pay gaps

The TUC has repeatedly stressed the importance of transparency in tackling discrimination in the workplace. We have seen clear evidence in the first year of gender pay gap reporting of the impact of mandatory reporting of pay data. Within weeks of the reporting deadline, all relevant employers had complied with their duty to publish pay data. This contrasted with fewer than ten employers reporting pay gaps under voluntary arrangements. Although evidence of the impact of the gender pay gap reporting regulations on outcomes for women workers has yet to be seen, it is clear that the mandatory reporting regulations have raised both the profile of this issue and the urgency with which employers are approaching it. 

The introduction of the regulations also sparked a widespread public debate on women’s pay and the inequalities which underpinned this. This has not only served to raise the public profile of the issue but has energised people to act. Recent research has shown that around three-quarters of those in workplaces required to publish gender pay gap figures were willing to take action to help their employers tackle these gaps^[27].

Although we are still waiting for the Government’s response to the consultation on this issue, there is widespread support for the introduction of ethnicity pay gap reporting, with plans to incorporate transparency on parental policies into the existing pay gap portal currently being consulted on. We appear, therefore, to be moving towards an approach where employers will be required to report multiple sources of information relating to pay gaps. We recommend that class pay gaps are reported alongside gender pay gaps to avoid the unnecessary complication of multiple deadlines. Within this wider policy context, class pay gap reporting, where inequality intersects with and underpins disadvantage experienced by other groups, could provide a greater insight into intersectional inequality.

The mandatory reporting of pay gap information relating to class pay gaps would also assist in:

·         highlighting class discrimination as an issue which needs to be addressed

·         prompting widespread workforce monitoring on this ground

·         prompting action to identify and address specific institutional barriers experienced by working class people entering, progressing and remaining in work

·         pulling together disparate activity on this issue

·         assisting employers to benchmark their gaps.

Currently, in gender pay reporting there is no mandatory requirement for an action plan or narrative to be published. Analysis by the Equality and Human Rights Commission^[28] has shown limited levels of voluntary compliance, with only around one in five employers having published a timebound action plan, with around half producing a narrative, many of which contained very little detail or clear commitments.

We have consistently argued that without mandating employers to put such plans in place the legislation is unlikely to have significant impacts on employers’ pay gaps. We would therefore be seeking mandatory production of action plans to close any gaps and  as part of reporting, employers should be required to produce a narrative explaining how the figures were arrived at, and to make an evidence-based statement that sets out what they consider to be the main causes of their class pay gap.

Workforce monitoring

The only way in which class pay gap reporting will translate into required meaningful change is through sustained activity which is focused on the root causes of these pay gaps, informed by monitoring using consistent categories. The use of consistent categories will ensure that measures can be compared across employers and by an employer over time.  We recommend that employers use the four areas outlined in existing Government guidance, which are already used by a range of organisations, to measure and monitor class background in the workplace. These are parental qualifications,  parental  occupation,  type  of  school  attended  and  eligibility  for  free  school  meals. Data should be collected from new and existing workers, interns, apprentices and job applicants.

Existing civil service guidance has been developed for reporting on these qualifications. However, we feel that the full range of questions outlined in existing civil service guidance^[29] may be too detailed for national use. They could be limited to four and still capture the information required to give employers a clear picture of where barriers and bias are thwarting the life chances of working-class staff and allow measurement of progress in addressing these.

A range of employers are already collecting data in these areas, with the numbers collecting socio-economic background data, both for new entrants and for current employees, increasing^[30].

3. Protecting against class based discrimination

For the first three decades of anti-discrimination law, race and sex remained the only grounds protected by the law. Since 1995 the number of groups who are protected has grown significantly to the current list of nine set out in the Equality Act 2010.^[31] The UK situation has been mirrored globally, with a trend towards increasing expansion in response to the growing understanding of the complexity of discrimination.

There has been a significant move across Europe towards extending the mandate of equality legislation to cover socio-economic status.  An overview of European equality legislation showed that in 2016 legislation in twenty of the thirty-five European countries included in the study provided protection against discrimination on a ground related to socio-economic status^[32].

However in UK law socio-economic status remains outside the groups that are explicitly covered by domestic equality legislation, despite the fact that it is arguably one of the fastest-growing type of inequality in the UK today. The continued exclusion of socio-economic disadvantage from the characteristics that are protected is increasingly at odds with people’s lived experiences of discrimination.

Economic inequality is not only the cause of discrimination but also the consequence. People from a range of groups already protected under the Equality Act 2010 would particularly benefit from additional protections around socio economic disadvantage.

The inclusion of a new protected group could protect people from being discriminated against in a range of ways. 

• Direct discrimination e.g. failure to shortlist a candidate based on their postcode being in a less affluent area,
• Indirect discrimination (most cases would be likely to fall under this) – e.g. unpaid internship listed as an essential requirement for a job
• Harassment - e.g. a manager creating a humiliating and offensive environment by makes disparaging and offensive comments about an employee’s ability based on negative stereotypes of working-class people.
• Victimisation - e.g. treating an individual unfairly because they have complained about an act of discrimination.

Inclusion in the Equality Act 2010 as a protected characteristic would mean that employers could undertake positive action both in terms of steps such as training and information provision and ‘tie break’ recruitment situations.

Multiple discrimination

In order to ensure that a new protected characteristic could be used most effectively to address the disadvantage experienced by those groups that are already covered by the Act, it would be helpful for it to be introduced alongside a provision for multiple discrimination. There is already an unenacted provision in the Equality Act 2010 relating to dual discrimination, however the reality of intersectional discrimination is such that it often involves more than two protected characteristics. It would therefore be more useful in challenging intersectional discrimination if individuals could take cases forward which incorporate the combined nature of the discrimination that they face.

---

The trade union movement was founded to build working class power, and to tackle the disadvantage and discrimination faced by working class people. And while the jobs done by working class people may have changed, we know that trade unions are still the best way to achieve that goal.

But we need action from Government to break through the barriers created by long-standing discrimination that has been reinforced by a decade of austerity.

Government should:

Introduced new rights for workers to negotiate for better pay and conditions through their trade unions, including :

• Unions to have access to workplaces to tell workers about the benefits of union membership and collective bargaining (following the system in place in New Zealand).
• New rights to make it easier for working people to negotiate collectively with their employer, including simplifying the process that workers must follow to have their union recognised by their employer for collective bargaining and enabling unions to scale up bargaining rights in large, multi-site organisations.
• Broadening the scope of collective bargaining rights to include all pay and conditions, including pay and pensions, working time and holidays, equality issues (including maternity and paternity rights), health and safety, grievance and disciplinary processes, training and development, work organisation, including the introduction of new technologies, and the nature and level of staffing.
• The establishment of new bodies for unions and employers to negotiate across sectors, starting with hospitality and social care.

Rebuild the public services working class people rely on:

• After ten years of damaging austerity, the government now needs to set out a ten-year plan for how to restore our public services to world class standards, with long term funding commitments. This must go beyond schools and hospitals, vital as they are, to cover the whole public sector, and include fair pay rises for all public sector workers.

Introduce new laws to tackle class discrimination including:

• Make discrimination on the basis of class unlawful, just like race, sex and disability
• Introduce a legal duty on public bodies to make tackling all forms of inequality a priority
• Make it compulsory for employers to report their class pay gaps.